Property: The Junction of Political and Economic Liberty

libertyI find it striking how little attention is given to the fundamentals upon which America and its namesake of democracy were founded. Amidst the political and economic turmoil that characterizes our time, we seem to neglect what is simultaneously important to each and all of us, liberty. We should never forget that the fundamental precept of democratic politics is and has always been the individual and his or her liberty, i.e. freedom from oppression from either foreign or domestic persons. Yet, it seems that government rhetoric has obscured the true meaning of what it means to be free by seeking to substitute what they call the “public welfare” for that of the individual. Perhaps the most militant weapon used in both the past and present is fear, but fear of what? Economic turmoil via crises, massive unemployment, giant restructuring of the markets and so on has left most of the American public confused and groping in the dark for solutions to these problems, because they intimately affect each individual’s daily life. We turn to the government for answers, yet our system continues to unravel at each successive piece of legislation carefully crafted to safeguard the holiest of bureaucratic utterances – the public welfare. To this I ask, but what of the individual? To find such answers as they have been pronounced for nearly two-and-a-half centuries, one needs to revisit the traditional notions of democratic government and free-market capitalism. Together they illustrate an intersection, that once laid bare, shines a brilliant light not just on past scholarly or even political achievement, but on the fundamental relationship between the economic and political.

This naturally begs the question as to how economic doctrine, namely how it fits within the larger framework of classical liberal theory and which economic system is most conducive to individualism, liberty, equality, and property. Given these criteria, capitalism is the most legitimate form of economic organization because its legitimacy parallels that of democracy. Just as democracy attains its legitimacy from participation, capitalism attains legitimacy by virtue of its requirement of participation. The difference is that participation is not mandatory in a representative democracy because stable government can exist (for some time) without direct influence from the masses. Shockingly, Dye and Zeigler note, “It is the irony of democracy that democratic ideals survive because the masses are generally apathetic and ignorant…The survival of democracy does not depend on mass support for democratic ideals…[A]ll that is necessary is that they fail to commit themselves actively to antidemocratic movements.”[1] More fundamental, is that the American democratic system possesses written law, namely the Constitution, which provides the framework that fosters individualism, while protecting liberty and one’s right to property.

Although capitalism has no such document, the market demands daily participation for no other reason than one’s basic subsistence—indeed, the market is literally manifested via the daily activities of rational consumers. And because any market necessitates property, mandatory action is the very basis of property itself. This provides both the need for the justification of property and is the linchpin that unites democratic theory with the traditional conservative notion of capitalist doctrine originally promoted by Adam Smith.

As mentioned above, the preeminent tenet of liberal theory is individualism, which liberty necessitates—the freedom to maintain one’s existence in accordance with their own self-interest so long as their actions do not infringe upon the equal liberty of others. However, so engrained in liberal theory that it seems almost common sense is that no individual is able to maintain his or her own life without the right to property, the justification of which is most clearly pronounced by Locke. His proviso asserts a key requirement for what constitutes an individual’s right to property—that being acquired or produced by his own labor. “…every Man has a Property in his own Person. This no Body has any Right to but himself. The Labour of his Body, and the Work of his Hands, we may say, are properly his.” The crucial conception to property rights in Locke is therefore the act of production, which necessitates a mixing of the worker’s labor with the object in question. The individual, by mixing his labor with the object, bestows upon that item the virtue of property: “he hath mixed his Labour with, and joined to it something that is his own, and thereby makes it his Property.”[2] But how does this translate into liberal democratic theory, particularly how does one’s right to property ensure his or her right to liberty? It is not until we answer this question that a substantive relationship between democracy and capitalism can be established.

Ayn Rand provides what many view as a highly idealist philosophy, commonly known as objectivist epistemology. Her philosophy attempts to reconcile classical liberal tenets with the material world. By doing so, she provides mankind with a moral justification for its material existence, thereby reinforcing both liberal democratic theory and its necessity of capitalism as the arbiter of social justice. She asserts uncompromisingly:

The right to life is the source of all rights—the right to property is their only implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave.[3]

For Rand, then, property rights are the very basis of life and liberty. Moreover, since life is deemed by liberal theory as a natural right, Rand also provides mankind with a moral justification for their natural right to exist and to hold property.

This has broader effects than some acknowledge today because the moral imperative of democracy, i.e. individualism, manifests itself via private property and the market. Thus, while the legitimacy of democracy comes via participation, the legitimacy of capitalism is manifested via man’s right to his own life. The traditional justification for property then becomes a crucial precept of liberty itself and the only viable means by which man is able to sustain his own life. That said, if man’s fundamental right is his ability to bestow his labor upon that which is to become property, and the value of property lies in the labor that man bestows upon it,[4] then man’s fundamental rights are his right to property (his political right) and the right to dispense of his labor as he sees fit (his economic right). More precisely, democracy provides proprietary legitimacy to acquire property via the law, and capitalism furnishes man the moral right to acquire property by virtue of its necessity for his survival.[5] That said, man’s fundamental right to his liberty presents itself via the duality of the political and economic right to sustain his own life. Therefore, these two dimensions form a coherent conception of man’s fundamental right to liberty, for they represent to him his own power to create and contribute to the betterment of his own position (or at least to sustain his current position) through the acquisition of property. Furthermore, the theoretical connection between democracy and capitalism is that while capitalism provides the moral legitimacy to acquire property, democracy protects that moral right via a commonly acknowledged and accepted canon of legal statutes.

Given such a justification for property within the canon of traditional liberal theory, one may reason as follows:

P1 Liberty necessitates individualism.
P2 Individualism is grounded in property rights.
C1 Liberty necessitates property rights.

In other words, liberty is based in the necessity to exist, whence the basis of property rights. Therefore, the traditional justification of property is grounded in the individual, not the state. If, then, liberty necessitates the right to acquire property free from state intervention, then the point at which the state becomes directly involved in the distribution of property becomes the point at which capitalism is circumvented and liberty, as pronounced by democratic theory, threatened.

[1] Thomas R. Dye, Harmon Zeigler, and Louis Schubert. The Irony of Democracy: An Uncommon Introduction to American Politics, 14th ed. (Boston: Wadsworth Cengage Learning, 2009), 114.

[2] John Locke, Two Treatises of Government: Cambridge Texts in the History of Political Thought, ed. Peter Laslett(Cambridge: Cambridge University Press, 1988), 287-288.

[3] Ayn Rand, “Man’s Rights,” in The Virtue of Selfishness (New York: New American Library, 1964), 110.

[4] Locke, Two Treatises of Government, 287-288.

[5] Rand, “Man’s Rights,” 110.

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Laissez Faire Links: Social Obligation in Obamacare, ObamaRetire?, Progressives vs. Madisonians, Minimum Wage Revisited

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LAISSEZ FAIRE LINKS

  • Is there a social obligation for me to provide my neighbors’ opportunity to receive healthcare?  What about if his provision negates mine?  Rituparna Basu at the Ayn Rand Institute throws down the argument from social obligation used by proponents of Obamacare.  One’s only “right” to healthcare rests on one’s moral requirement to earn the best healthcare he or she can, not one’s right to receive it at the expense of someone else.  She also gives a comprehensive overview of how Obamacare will greatly limit younger Americans and what we can do to move forward.
  • Ari Armstrong at The Objectivist Standard Blog asks “Is ObamaRetire Next?”  Now that Progressives have our healthcare, they want our retirement accounts as well.
  • Judge Napolitano writes an informative piece contrasting the progressive status quo with the more liberty-loving Madisonians.  The latter founded America on the principle of individual liberty and limited government.  The Progressives, a title encompassing most of Washington, seeks to turn this idea on its head, placing the State as the first and final arbiter of personal liberty.

“Note that Obama doesn’t say that “America deserves a raise” because low-wage workers have suddenly become more productive and, therefore, more valuable to their employers. No, he says that they deserve it because “nobody who works full time should have to live in poverty.” What about the consequences of the minimum wage? Consequences be damned! What about the businessman who must make ends meet and can only pay a wage for unskilled labor that is lower than the minimum wage? Businessmen be damned! What about the workers who are willing to work for lower than minimum wage, but will be laid off or replaced by automated teller machines and other automatic processes? Workers be damned! The minimum wage is right! It makes us feel moral! Reality be damned!”

Obamacare Not Enough, Now Progressives Want Your Retirement

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Now that Progressives have control over our healthcare, they want our retirement accounts as well.  Using what Linda Gorman calls the “health care playbook,” progressives are aiming their snare guns at one of the final untouched frontiers in American individualism, the retirement account.

“Progressive activists are in the early stages of attempting to create a retirement security crisis. Using the health care playbook, they claim that people lack access to ‘adequate retirement security’.  The lack of access is said to impose large costs on everyone else because people without ‘retirement security’ consume more public assistance payments. Government must ‘solve’ the problem because only government can provide secure retirement investment options for all by mandating that people purchase them.”

Under the guise of “security” and led by the false identification of a “public good,” the Left will tout any retirement reform much the same way Obama and the Left sold Obamacare to the public.  The “public good” is in danger because a lack of coverage by too many will drive up costs.  Meanwhile, this ignores the economic reality that universal access destroys market access, which drives up costs while greatly diminishing quality.  More importantly is that the notion of a “public good” is not definable.  Rather, it is merely clever jargon to disguise the coercive nature of wealth redistribution schemes.  In the words of Ayn Rand, “since the public is merely a number of individuals, the idea that ‘the public interest’ supersedes private interests and rights, can have but one meaning: that the interests and rights of some individuals take precedence over the interests and rights of others.” (my emphasis)  The Left has used this jargon as their rallying cry since before LBJ’s Great Society experiment began, and whether accepted or rejected, the “public good” provided the largest of Obama’s soap boxes when campaigning his healthcare reform.  They will assuredly use it here if such legislation makes its way out of Colorado onto the national political scene.

Before you write this off as a close call and go about your day, keep a couple of things in mind.  First, passage of House Bill 1377 in Colorado failed by only 1 Senate vote.  And second, Colorado was also the staging ground for many aspects included in Obamacare.  Ari Armstrong over at The Objective Standard Blog says this:

“Three years before the 2010 passage of the national ObamaCare law, a “blue ribbon” commission in Colorado explored—at the behest of the state legislature—ways to expand government involvement in health care. Among other proposals, the commission recommended forcing ‘all legal residents of Colorado to have minimum insurance coverage’, ‘providing sliding-scale subsidies for low-income workers to purchase private coverage’, and creating a government ‘Connector’ to assist individuals and small employers to understand and choose among insurance options.”

In true statist fashion, the government claims the rights of some to fix problems itself creates.  From the Great Recession to the entitlement crisis, government solutions for government-created problems are becoming the hallmark of U.S government.

 

Should Obesity be a Government-Protected Disability?

Dan Mitchell from the Cato Institute shows yet another example of over-reaching government intervention.  According to a BBC report, European leaders are debating the merits of classifying obesity as a protected disability.

“The EU’s top court is considering a test case which could oblige employers to treat obesity as a disability.  Denmark has asked the European Court of Justice to rule on the case of a male childminder who says he was sacked for being too fat….The court’s final ruling will be binding across the EU….Audrey Williams, an employment discrimination expert at Eversheds law firm, said the judges would have to decide ‘whether obesity itself should trigger preferential rights, or should only impact where an individual, due to obesity, has other recognised medical issues’.  If the judges decide it is a disability then employers could face new obligations, she told the BBC.  Employers might in future have a duty to create reserved car parking spaces for obese staff, or adjust the office furniture for them, she said.

The issue at hand here is choice. Do I have the choice to eat anything I want and as much as I want?  Sure, but does my choice place an obligation on employers to treat me as a part of a “preferential” class?  Absolutely not!  If the EU rules in favor of this approach to obesity, many employers will incur greater costs.  This is yet another step away from freedom toward the bureaucratization of our generation.

The obesity issue is not confined to Europe.  Rates in the U.S. have never been higher than they are today.  According to a nice graphic published by the Wall Street Journal, Americans are leading the way with 1 out of 3 classified as obese.  Consequently, Americans are familiar with politicians legislating lifestyle choices.  President Obama campaigned his health care reform partly on rising obesity rates contributing to higher health costs.  New York City Mayor Michael Bloomberg’s attempted ban on giant size sodas is another example.  

What should one take from this?  According to those in Washington and some municipal governments, rising obesity rates justify the use of prescriptive behavioral controls.  Broken down a bit further, lifestyle choices made by free individuals, if deemed undesirable by some, justify the use of force.  Once our government classifies a condition as a “disability,” it will likely grant itself de facto powers to legislate.

 

 

Laissez Faire Links: Minimum Wage, Rational Patriotism, Equality, and Obamacare

Government rights-violating policies take on many forms these days.  Below are a few issues circulating throughout Washington, the press, and the blogosphere.

The first piece is a wonderfully impassioned lashing against the Left and their refusal to acknowledge the economic reality that a minimum wage imposes on unskilled workers.  Yaron Brook, Director of the Ayn Rand Institute attacks the false logic behind a minimum wage raise, and it has nothing to do with economics.  Rather, it is coated with a thick malaise of altruistic do-goodedness.  He hits the nail on the head:

“The economic case against the minimum wage is easy to grasp. When the government artificially raises the price of something, the demand for it goes down. Raising the minimum wage decreases the demand for unskilled labor (usually the young).

Raising the minimum wage feels good because it appeals to the prevailing altruism in the culture.

Many people understand that the minimum wage defies economic reality. What we need are more people to understand that the morality of altruism defies reality. Human life and happiness require freedom, including the freedom to compete on the labor market with lower wages — yet this is the very reality the altruists want us to ignore in the name of the “poor.” That’s why it’s impractical — and any policy based on it will be destructive.

To move toward freedom — to defeat the senseless and immoral absurdity that the minimum wage represents — it is altruism that must be defeated.”

Full Article here: The Minimum Wage vs. Reality

 

Michael A. Laferrara, writing for The Objective Standard Blog uses government taxation of American corporations overseas to define patriotism in terms of what is rational for a better America, not a more intrusive American government.  “Rational patriotism does not mean throttling productive citizens for the sake of politicians and bureaucrats. Rational patriotism in America means loyalty to what America stands for: the inalienable rights of individuals to life, liberty, property, and the pursuit of happiness.”

Citizens for Tax Justice versus Rational Patriotism

 

Next is a rebuttal of Thomas Picketty’s book Capital in the Twenty-First Century.  Picketty argues that income inequality has increased because investments grow faster than wages.  His solution?  Legislate an 80 percent wealth tax on the rich.  John Stossel at Reason counters that despite the Left’s concern over income inequality, income mobility in America is still very much alive.  More importantly, economic mobility is a result of the free market, and thus, logically, cannot be legislated.  It continues in spite of a natural inequality in living standards. The issue is then one of liberty rather than equality.

Debunking Popular Nonsense About Income Mobility in America

For a strictly Objectivist take on Picketty’s argument in Capital, see Yaron Brook’s response here.

 

Just as the government would like to legislate economic equality, the urge to legislate a nation’s collective living standard is akin to Obama legislating better healthcare.  Don Boudreaux, Professor of Economics at George Mason University, brings this flaw of logic to light.  Legislating universal access to a scarce item certainly does not guarantee any degree of quality.  In fact, basic economics tells you that mandating a minimal quantity of any commodity will lower the quality of that item due to the basic law of scarcity.

Dear Mr. Krugman

 

Let us summarize these four issues and the government’s position on them.  Let us mandate that employers pay wages higher than they would normally pay for a given skill set, forcefully redistributing wealth to less productive avenues.  Let us tax successful corporations for being successful, forcefully taking and redistributing capital to less productive avenues such as the welfare state.  Let us ignore income mobility, the manifestation of which is hope, focussing only on income inequality and turning what is a natural occurrence of diversity and freedom into a scapegoat for more taxation, spending programs, and laws.  So we have forced redistribution of wealth, forced redistribution of capital, and a blatant denial of natural facts for smoke-and-mirror rationalization.  Oh and let us not forget the Obama administration’s false equation of quantity of healthcare received to quality of healthcare produced.

Does this sound like a rights-respecting or rights-violating government?